Construction at Saigon-Hiep Phuoc, expected to be a major port in Ho Chi Minh City by 2011, has stalled due to lack of funds. Photo courtesy of Tuoi Tre

More than US$50 million has been sunk into two major ports in Ho Chi Minh City in the last four years, but they remain unused after running out of funds to complete infrastructure including connecting roads.

Saigon - Hiep Phuoc in Nha Be District and Phu Huu in District 9 had been expected to move waterway traffic out of the city center by 2011. Nha Rong - Khanh Hoi Port in District 4, to be closed when the new ports are ready, now receives most cargo and passenger vessels arriving in the city.

Work on Saigon-Hiep Phuoc began in 2009 and there was great hope that it would open in 2011 and become the city's entrepôt.

But before any of that could materialize, the company building the port announced earlier this month a halt to construction until it can raise more money and roads connecting to the port are built, Tuoi Tre newspaper reported Monday.

Workers coming to the port have been forced to use mud roads since the main road of 2.3 kilometers from the Hiep Phuoc Industrial Zone to the port remains on paper.

The announcement may have been made recently, but work stopped so long ago that the pile foundation is now covered in weeds and piles of iron and steel materials have rusted.

Many piers and storage areas are unfinished.

Nguyen Hoang Dung, general director of Saigon-Hiep Phuoc Port JSC, said the construction stopped in late 2011.

"Many items have been damaged since," he said.

A VND2.735 trillion ($130.8 million) budget was approved for the 100-hectare port but it has only received 38 percent of that amount.

Around VND449 billion ($21.47 million) came from the government in 2009 and 2010, but nothing subsequently.

Maritime Bank signed a contract in 2011 to lend VND2 trillion ($95.64 million) tothe project, but the tightening of monetary policy soon afterwards prevented the bank from going ahead.

Le Cong Minh, chairman of Saigon Port Company, said the Nha Be port was designed to receive vessels of up to 50,000 tons or around 8.5 million tons of cargo annually.

The other port, Phu Huu in District 9, has been in use since 2006 but it has no road allowing container trucks to enter.

There are not even concrete plans yet for such a road, according to the investors.

A worker told Tuoi Tre that as a result only one ship berths at the port every one or two weeks, using it as a transit.

Nearly VND370 billion ($17.70 million) has been spent on the 24-hectare port to build many facilities like a 120,000-square-meter yard for containers and 2,600 square meters of warehouse space, only for them to remain unused.

It made losses of more than VND2.1 billion last year on revenues of VND2.9 billion.

Insiders said the government failed to plan properly and take a comprehensive view when approving the ports.

Authorities have not even kept a close watch on them, as evidenced by transport minister Dinh La Thang only asking Saigon-Hiep Phuoc investors to explain their problems after Tuoi Tre published the story recently.

Nguyen Anh Tuan, director of Portcoast Consultant Corporation based in Ho Chi Minh City, blamed the city government for delaying the conversion of Nha Rong-Khanh Hoi Port into a commercial-office building site as planned to raise funds for Saigon-Hiep Phuoc.

He said Phu Huu Port should not have been approved in the first place since even if it gets the connecting road it would never be able to compete with the bigger, well-equipped Cat Lai Port nearby.

Glenn Kong Wai Keong, general director of the First Logistics Development Company, a joint venture between Vietnam, Singapore, and Japan, said the country should boost production and exports first before investingin ports.

"Vietnam wants to target markets like the US and Europe, but its economic growth is slowing down," Tuoi Tre quoted him as saying.

He also suggested that instead of building new ones, the country should link existing ports including many in nearby Ba Ria-Vung Tau Province that are also experiencing a slowdown.